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Anarchist FAQ Versus Hong Kong

In the parallel up-is-down psycho-world of anarchist 'economics' one can find such gems as the assertion that free market capitalism is not the foremost reason for Hong Kong's rapid move from universal subsistence to near-universal affluence from 1950 to 2000, by which point the country was wealthier per-capita than the UK. [1]

The basis for this case is two-fold; the government of Hong Kong owns title to almost all of the land within its borders and the LegCo members have a lot of cosy relationships with folks in business. On the face of it these seem very practical points. They are certainly both true, but there's something missing here.

On the first point, government control of land is a key factor in the absurdly high house prices in Hong Kong. Linda Yueh wrote for the BBC in January 2014 that house prices in Hong Kong averaged 13-times Hong Kongers' annual incomes. [2] In a similar vein Yvonne Liu commented in January 2014 on the city-state being ranked the most unaffordable place to live four years in a row. [3][4] In both instances it was rents and mortgages that were the bugbear, not the cost of anything else.

The LegCo subsidises many housing projects throughout Hong Kong. [5] This should be driving prices down, right? So why, when it is considered unsanitary for median real estate prices to exceed the median income by more than 3 times, does real estate reach 13 times that income?

This makes housing the weakest industry in Hong Kong in terms of outcomes for HKers. Why? There is plenty of un-developed land and building upwards decreases cost per unit of housing when building towers. Perhaps, lo and behold, the state is a bad manager of land. Wouldn't that be a revelation!

On the second count I have to ask; what businessfolk? Why financiers and property developers, of course! Considering the fact that all fiat currencies - including the Hong Kong Dollar - are issued by government central banks and that people connected to those banks will be the first to get ahold of newly created digital deposits, and that they will almost invariably spend those funds on the acquisition of land rights (actually buying land outright is problematic in Hong Kong, and so correspondingly rare) then the usual cycle of price inflation seen in every wealthy country today will play out in Hong Kong as well. [6]

In fact price inflation versus unequal access to newly created money is one of only two reasons there's any poverty left in Hong Kong, the other three Asian Tigers, and all OECD members. The first part of this post probably made obvious that the other factor is regulation of construction.

Hong Kong is thought of by historians and economists as one of the 'four Asian Tigers' alongside Singapore, South Korea and Taiwan. On that note, Hong Kong today is one of few rich places where the USD GDP is rated higher at PPP than at nominal exchange rates, 52k vs. 34k per capita, respectively. [7][8] That's some serious juice. Somebody earning 40% of that level is taking home 20k per annum. That's hardly the breadline if, for the sake of argument, rent and utilities total 1k USD per month.

Also we have a load of controls in this experiment, namely the Soviet Union, Cuba, Laos, North Korea, those impoverished nations that prevented entrepreneurial capitalism from arising on a large scale like pretty much all of Sub-Saharan Africa, mainland China, and India before the 90's. And what do they have to show for it? Well, nothing but piles of bodies, really.

The Economist publishes a delightful little ditty called the Crony Capitalism Index. [9] I was introduced, or reintroduced, I forget which, by a Reddit user who took me to task for suggesting that Hong Kong and Singapore are pretty much the most economically free places in the world. [10] I looked around for info on the matter and responded with the text in quotes below.

So China's economy is equivalent to 33 HK's. Singapore's GDP is a little bit bigger of late than Hong Kong's. Both are home to considerably fewer people than London. So the Economist table is effectively including two cities in a list of countries.

Oh, and I just realised that their criteria are literally anybody who makes a lot of money in any of a certain set of industries because cronyism in those industries is more likely... so it's not even measuring demonstrated cronyism, just proximity to the possibility of it.

It certainly must happen. They didn't choose that set of industries for nothing. I acknowledge that, but...

Do read the links in the order in which they appear please. Finding the right comments in the third link might be quite interesting. They are all by a user called BestTrousers and start with "RI" meaning R1.

The main argument used by HealthcareEconomist3 is to give a survey of several works, while BestTrousers goes for comparative advantage.

Hopefully you good folks can indulge me by forgiving this post. It is an unfinished mess because I wanted it out there as the anchor for a hyperlink from a Reddit thread.At the momebt everything below is a jumble of notes, but I will be reworking it bit by bit starting today.Hopefully this post will be sorted out and typed in full before the end of April 2017.

~~~

Historical materialism is the idea that history progresses in stages - slavery, then feudalism, then capitalism, then socialism, then communism - driven by changes in the technologies or techniques of production, and that any human civilisation will exemplify this process.

This makes historical materialism an exercise in both historicism and materialism.

Historicism is the idea that studying the past can reveal history's in-built course or narrative, and so show you the future.

Materialism is the idea that ideas ( and institutions) ultimately* don't matter in determining our destinies, and that therefore only material…

The idea that labor exploits capital is equally as plausible, sans assumptions*, as the idea that capital exploits labor. This is only intended as a response to the formal concept, descriptive or normative, of exploitation in Marx's schema from Capital Volume I.

* Assumptions include the power relation whereby capital is just assumed to be above labor hierarchically.

~ ~ Capital exploits labor because...
... Capital earns income from production done by labor that capital didn't perform
& ~ Labor exploits Capital because...
... Labor earns income from capital that labor didn't buy~
Basically in good old formal logic fashion both of those cases above, being factual descriptions, are true at once or are false at once.